Wire Transfer is a money transfer made by means of electronic communication. It can be both domestic (carried out within one state) and international, when money is transferred to a recipient located in another country. For such transfers, national or foreign currencies can be used. If the sender transfers, for example, rubles, and the recipient must collect the amount in US dollars, then the conversion will be carried out. As a rule, the bank makes a similar procedure at the official exchange rate in force at the time of the transaction. The average time for a Wire Transfer transfer is no more than 5 days.
What is good about such money transactions? First of all, its security and high speed. If you need to quickly transfer a certain amount abroad, then it is the Wire Transfer system that will help you not to worry that the money will “hang” somewhere, reach the wrong recipient or even “disappear” due to various fraudulent actions.
That is why this technique is so widespread around the world and is the most popular among clients in all countries.
Participants of the Wire Transfer
To carry out this kind of transaction, all you need is the presence of three participants:
- sender (can be both an individual and a legal entity);
- recipient (company or individual);
- intermediary (an organization that carries out the transfer itself, guarantees its execution and receives a certain commission).
That is, a wire transfer is not a free operation. However, this only applies to the sender. The recipient pays nothing to collect the transfer due to him.
How Wire Transfer works
The intermediary organization has the right to demand the opening of a current account, from which money will then be transferred. But in most cases, this operation is not required. The sender is simply invited to fill out a special form, where you must specify the following data:
- information about the sender and recipient;
- transfer amount;
- destination of the transfer;
- transfer currency;
- recipient country.
Next, the sender transfers the specified amount of money and an additional commission (may vary greatly depending on the established tariffs) to the cash desk of the intermediary organization.
The recipient must contact the most conveniently located branch of the bank or post office, presenting an identity document. As a rule, nothing else is required, and he can immediately receive the transfer in cash. However, in Europe, Canada, the United States and other non-CIS countries, more information about the recipient of funds may be required. Depending on the terms of the transfer, this intermediary can be IRC, IBAN ISC and other data. If one or more details are incorrect, the bank that carries out this transaction has the right to request a swift-code (SWIFT). It is a confirmation of the legitimacy of the issuance of a sum of money to the recipient.
In some cases, a Wire Transfer transfer can also be picked up through an ATM. To do this, the recipient must have a plastic card of the intermediary bank through which the movement of the amount is carried out. Also, some credit organizations provide the service of "Internet banking", which greatly simplifies the procedure for sending and receiving such a transfer.
Distinctive Features of Wire Transfer
This is a very convenient system for payments via the Internet. For example, to pay for purchases in virtual stores. It does not matter from which country you expect the goods and which national currency used there. You simply transfer money from your card or bank account (or deposit the required amount in cash at the cash desk) and send it to the recipient using his details. Quickly and without unnecessary paperwork. The amount will be converted in the process into the currency required for the recipient at the current rate.
The amount of the commission, as a rule, is 0,5-2% of the transfer amount. I mean, it's pretty profitable. But if you want to transfer a small amount, then you will certainly encounter a minimum commission amount. Therefore, the Wire Transfer system is considered more profitable specifically for large cash transactions.
Most often, such a transfer "goes" to the recipient in 1-3 business days. But this period may vary depending on the following factors:
- difference in time zones;
- work schedule of departments of intermediary organizations;
- time of sending the transfer and. etc.
If the bank additionally checks each client for reliability, then the terms for the transfer will be increased.
The Wire Transfer system is different in that intermediary organizations have very wide opportunities and powers. There are no uniform tariffs, terms and restrictions. Therefore, before making a transfer, I recommend that you first familiarize yourself with all the conditions in force in the selected bank.
Disadvantages of Wire Transfer
First of all, this is the non-uniformity of the approach. Since each bank has its own conditions for making money transfers through this system, it is very problematic for customers to calculate their cost and terms. This problem is especially relevant for international transactions.
Another disadvantage noted by the clients of this system is the lack of confidentiality of the transfer participants. It is mandatory for the sender and recipient to provide the intermediary with their personal data, as well as the specific purpose of the transfer. And this raises well-founded fears of possible problems with the tax authorities in the future.
And, of course, most clients are not satisfied with the terms of Wire Transfer. After all, modern electronic transfers are often completed in a matter of hours, or even minutes. However, this system still occupies a leading position in terms of popularity among individuals and legal entities.